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As Some Athletes Cash In, States and Colleges Mull Rules on NIL, Sports Betting

The NCAA and many college sports administrators hope for federal legislation that would preempt the patchwork of laws passed in at least 28 states.

By Mark Wolf  |  September 5, 2023

No American cultural institution has changed so radically in the past three years than big-time college sports.

The Pac-12 Conference, home to more collegiate championships than any other conference, has been decimated by defections that left only Oregon State and Washington State on the inside looking out as the Big 10, ACC and Big 12 swallowed their marquee members. 

NIL rules—short for name, image, likeness—have triggered a gold rush among star athletes. Colorado’s new quarterback, Shedeur Sanders, who set a school record for passing yards in the Buffs’ season opening upset of Texas Christian, is driving around Boulder in a new Maybach, whose sticker shock hovers around $200,000. His NIL deals are worth a reported $1.3 million. 

Haley and Hanna Cavinder, twin sisters and Miami Hurricanes basketball stars with 4.5 million followers on TikTok, netted $1.7 million in NIL deals. They’re bypassing their fifth year in Miami and have made their debut on WWE pro wrestling events, though not yet in the ring.

A lineup of current and former Iowa and Iowa State athletes are involved in a sports betting scandal, allegedly including bets on games in which they played.

“You’re talking about a fundamentally different relationship between the athletes and the school.”

—Kendall Spencer, former NCAA long jump champion and Olympic hopeful

A panel of mainly college administrators, some of them former athletes, gathered to mull the current state of college sports during a session at NCSL’s Legislative Summit.

Since the NCAA, which long opposed any direct outside payments to athletes, was dragged into scrapping its ban on NIL in 2021, at least 28 states have passed their own laws regarding NIL. In the NCAA’s view, that’s about 27 laws too many.

The laws “make a ton of sense” but have created a complicated legislative landscape, says Tim Buckley, the NCAA’s senior vice president for external affairs. “The NCAA is making changes, but our ability to be an effective national governing body is being tested like never before. This patchwork (of state legislation) is challenging in a number of different ways.

“The lack of coherent and consistent consumer protection in these laws: some require agent certification, some don’t. Some require financial literacy programs, others don’t. Athletes and their families are left to wonder if they’re dealing with a bad actor or an honest broker. There’s a bit of an arms race going on with some states trying to outdo one another for a competitive advantage for their (state institutions).”

Lydia Tealer, executive associate athletic director at Florida, noted that a recent state law in fellow Southeastern Conference member Missouri allows athletes who commit to a college in their home state to become immediately eligible for NIL deals while they are still in high school.

Some Want Federal Direction

The bottom line for the NCAA and many college sports administrators is for federal legislation that would preempt all those state laws. A bipartisan trio of U.S. senators—Cory Booker (D-N.J.), Richard Blumenthal (D-Conn.) and Jerry Moran (R-Kan.)—released a draft NIL bill and several others, including Ted Cruz (R-Texas), are involved in the process. The proposals differ but would grant the NCAA power to set NIL standards for colleges and athletes. Skepticism about the NCAA’s historic intransigence is expected to make the effort a heavy lift.

Thirty-five states allow sports betting and the Iowa/Iowa State scandal is either an anomaly or the tip of the iceberg. Buckley approvingly cited an Ohio law passed this year that allows gaming regulators to exclude from the state’s betting market anyone who threatens violence against athletes or sports officials, “where the threat is related to sports gaming.”

The panel generally extolled the virtues of college sports. Tealer noted that the $4 billion in athletic scholarships awarded in 2019-20 by the more than 2,000 U.S. colleges with varsity athletic programs is second only to the benefits provided by the GI Bill.

“Unlike any other part of the world, athletics is a fundamental part (of society),” says Angel Mason, athletic director at Berry College. “We use sports to provide access, as a way to build value. When employers look at a stack of applications, student athletes stand out. It develops our ability to think about more than just ourselves, the ability to fail and get back up. It’s fundamental to who we are in the U.S.”

A few proposed laws, notably one in California, would institute revenue-sharing plans for college athletics.

“You’re talking about a fundamentally different relationship between the athletes and the school,” says former NCAA long jump champion Kendall Spencer, who holds a law degree from Georgia and hopes to qualify for next year’s Olympics in Paris. “This is going to become more of a business arrangement based on men’s basketball and football with no conversation of the impact of what’s going to happen to Olympic sports.

“It’s pushing student athletes in direction of being employees of the university instead of student athletes.”

Mark Wolf is a senior editor at NCSL.


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